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Hewlett-Packard and Foxconn are partnering to create a new product line of servers for the cloud. The new offerings will be designed specifically for service providers.

In their announcement Wednesday, the companies indicated the new servers would fill the growing needs of service providers, who are looking for both performance gains and cost reductions even as they expand. The companies also mentioned the transition from hosting-as-a-service model to new delivery platforms like Infrastructure-as-a-Service, which will boost the need for cloud-optimized servers.

HP President and CEO Meg Whitman said in a statement that "customers and partners are rapidly moving to a new style of IT that requires focused, scalable and high-volume system designs."

'Business Model Innovation'

She added that the alliance with Foxconn "reflects business model innovation in our server business, where the high-volume design and manufacturing expertise of Foxconn, combined with the computer and service leadership of HP, will enable us to deliver a game-changing offering in infrastructure economics."

The joint venture will formally begin Thursday. The companies did not release any details about pricing, technology or availability. The new servers are expected to be sold under the HP brand, at least at the beginning, and they will be available in a variety of rack form factors.

HP is the largest server vendor in the world, accounting for 28 percent of the market as of fourth quarter. Taiwan-based Foxconn is the largest contract manufacturer of electronics, making most of Apple's iPhones and iPads, for instance, as well as HP's ProLiant servers.

Earlier this year, IBM sold its low-end server business to China's Lenovo, and, following that move, Whitman told The Wall Street Journal that she saw IBM's sale as providing an opportunity for HP to increase its market share in that space. IBM is licensing its Power processor to server makers, however.

New Demands

It's not clear to what degree the HP alliance with Foxconn is part of Whitman's plan, since cloud-optimized servers may have more specialized requirements than the ones in IBM's now-sold unit.

For its part, Foxconn may be targeting competitors in its home base of Taiwan, such as Quanta, which has been making servers for Facebook and Amazon, among others.

Foxconn founder and Chairman Terry Gou told news media that customers are placing new demands on "the breadth of design capability, value-oriented solutions and large-scale and global manufacturing capabilities," because of the radical changes on the entire supply chain being driven by cloud computing.

Earlier this week, HP announced it was expanding its portfolio of solutions for enterprises' needs. The expansion includes enhancements to the HP-UX OS and the HP CloudSystem Matrix with HP-UX.

The company said the CloudSystem Matrix improvements included the ability to obtain better performance and flexibility from larger private cloud deployments, lower the entry cost of HP-UX private cloud deployments, and increase data center processing capacity.